Blackhawks owner Rocky Wirtz sues state over liquor taxes

Gaming Board chief says funding, staffing problems would delay

Illinois' showcase $31 billion public works program hit serious resistance Tuesday, with both the timetable and the legality of key financing called into question.

Chicago Blackhawks owner Rocky Wirtz, who also runs a $1.5 billion-a-year liquor distribution empire, sued in Cook County Circuit Court to challenge funding for the construction package, which relies on a new video poker law as well as liquor, candy and other tax hikes slated to go into effect Sept. 1.

Meanwhile, Illinois Gaming Board chief Aaron Jaffe declared it "absolutely impossible" to meet a mid-September deadline imposed by the legislature to draft rules outlining how video poker will be regulated in thousands of bars, restaurants, truck stops and social clubs across the state.

Jaffe said he could not predict when the first machines might go online -- and bring in cash to help finance road, school and other building projects -- cautioning that lawmakers failed to provide adequate money and staff to quickly jump-start and police a new industry that could be ripe for abuse. Regulators estimated the board would need at least 75 more staffers and $10 million just to launch the program, not counting regulatory costs down the road.

"This board has been one that has cleaned up a lot of messes, and we don't intend to make any messes," Jaffe declared at the board's monthly meeting.

The Wirtz suit could pose a greater threat to the public works plan, which would be hard to launch if a court blocked or stalled implementation of the tax hikes or gambling expansion. Legal challenges were expected when Gov. Pat Quinn signed the measures into law this summer. But in Wirtz, the program now has an opponent with broad political influence and the deep pockets necessary to mount an effective court fight.

The suit challenges the constitutionality of a package of new laws designed to create revenue to finance construction borrowing.

Wirtz lawyer F. Thomas Hecht said his client would seek an injunction to block the revenue initiatives. But it is unclear whether a hearing on such a request could take place before Sept. 1.

Wirtz's family-owned liquor business is also a party to the lawsuit, which objects to the way lawmakers imposed much larger tax hikes on hard liquor than on wine or beer. "It strikes out at a small group of business enterprises without justification or principle," the lawsuit alleged.

In an interview, Wirtz said he didn't in principle oppose tax hikes for construction. His objection, he said, was to the haphazard way lawmakers crafted the program.

There's an irony in Wirtz's decision to take a prominent opposition role. The last major liquor tax hike, passed a decade ago to finance a different public works program, was battled in court by Evanston resident Saul Wexler who took it all the way to the Illinois Supreme Court. The Wirtz liquor business, then run by Wirtz's late father, William, was a defendant in Wexler's suit -- which raised similar legal arguments now being leveled by Rocky Wirtz against the new tax hikes.

In 2004, the high court dismissed Wexler's action on technical grounds, but noted that the Wirtz company did not "wish to challenge" the 1999 liquor tax hike and had issued "strenuous protests" to what Wexler was trying to do at the time.

The newly filed Wirtz lawsuit contends lawmakers violated several dictates of the Illinois Constitution in stitching together the building program, most prominently a mandate that legislation on substantive matters not pertain to a mishmash of unrelated subjects.

The suit also claims the video poker program, which would allow bars across the state to install video poker machines linked to the state through a closed-circuit Internet connection, violates federal gambling rules.

A companion plan to hire a private management firm to run the Illinois lottery similarly runs afoul of federal law, the suit alleges.